View: India on right track to reach the top 50 in Ease of Doing Business Index

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Updated: Nov 08, 2018, 06.41 AM IST

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The experience over the last four years has shown that India can excel when a strong political leadership is committed to reforms

By Ramesh AbhishekIndia was ranked a modest 142 out of 189 economies in the World Bank’s Doing Business Report (DBR) 2015, last among the Brics (Brazil, Russia, India, China, South Africa) nations, and fifth among the eight South Asian economies.

This acted as a catalyst to kick-start the journey of improving ease of doing business in India. For the first time, a nodal department — the department of industrial policy and promotion (Dipp) —was appointed to spearhead this initiative, and also implement Prime Minister Narendra Modi’s vision of being ranked in the top 50 of the DBR.

India’s stunning improvement in the last four years — it is 77th on the 2019 DBR released last week — is culmination of the efforts of Dipp and the various implementing departments spanning central, state and municipal governments.

To put things in perspective, India is now the highest-ranked South Asian nation and the third among the Brics.

In two years, India has improved its rank by 53 points, a jump that has not been achieved by any economy that is comparable to India in size and scale. Along this remarkable journey, it has learnt several important lessons. First, we have learnt that persistence pays off. This year’s results are the culmination of four years of effort, and not just that of the past year. This is particularly true of two indicators: ‘Trading Across Borders’, where India’s rank improved from 146 in 2018 to 80, and ‘Dealing with Construction Permits’, where it moved from 181 last year to 52.

These dramatic improvements have resulted from the dedication of the customs, shipping, ports and municipal corporations of Mumbai and Delhi, who have been painstakingly working on business process reengineering, online single-window systems and infrastructure improvements since 2015.

Their hard work has only paid off this year, since deep and lasting reform takes time to have its intended impacts felt on the ground. We have learnt that the World Bank follows a rigorous feedback-driven process, and credit is only given once the reform reaches the users, not when the change is introduced by the government.

Second, we have also learnt that the client experience matters the most. This means that no reform is complete until its effects are felt by its users.

With this understanding, India has mainstreamed private sector feedback into its reform process. Today, both Dipp and implementing departments actively solicit feedback from users on whether the reforms are working as intended, or if any corrections are required. This has helped authorities to identify gaps in the implementation of reforms and rectify them to have the intended impact. Many departments have innovated in this regard. All of this has been supplemented by a wide-ranging communications effort using not just traditional media, but also social media like Facebook and Twitter.

Several departments, including the municipal corporations, have established WhatsApp groups with their users, to address in real-time any challenges or constraints that are being faced by the users. These have enabled us to fundamentally transform how the government communicates with citizens and, thereby, transform the way the government machinery operates.

Third, in countries of the scale of India, coordination is critical. Since the beginning of the ‘ease of doing business’ project, Dipp has been coordinating the reform agenda across implementing departments within central, state and municipal governments. However, dramatic improvements were seen only since November 2016, when a nodal department was identified for each indicator.

A task force was constituted in each nodal department consisting of senior officials from all relevant departments and Dipp. This led to much greater coordination between the departments and the reform being expedited.

Finally, we have found that there is great value in learning from the experience of other countries. For example, the best practices of other economies helped us drastically reduce the costs of ‘Dealing with Construction Permits’.

We also look forward to sharing our experiences with other Asian and African countries, which have already expressed interest in learning from our business reform experience.

Our experience over the last four years has shown that India can excel when a strong political leadership is committed to reforms, and a group of dedicated and hard-working officials is given the support they need to get things done. The lessons we have learnt till date will be fundamental in our efforts going forward to make India reach the top 50 in the Doing Business Report.
The writer is secretary, department of industrial policy and promotion, ministry of commerce and industry, GoI

(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)